Tips and Tools #13: Building an Organization? How to Identify and Recruit Organizing Committee Members

Printed in Columbia Free Press by Wade Rathke

If an organizing committee is at the heart of building a community organization, how do you find the people who will join that committee? This definitely is not simply “add water and stir!”

Assuming we have already identified and defined the community, for an organizing committee to be effective, it will have to be representative of that community. All of the community!

If the community is geographical, that means ideally that the organizing committee will include active members from all points of the compass. Furthermore, the committee will also have to reflect the diversity of the community, racially and ethnically for sure, but also in terms of gender and possibly religion.

I say, ideally, because that is the task. That is not to say that failing to check every box means the organization cannot be built or be successful, but it is a critical part of the task because the beginnings do prejudice the ends. A dominant group that is unrepresented on the organizing committee will quickly determine that the organization is “not for them,” no matter what the leaders or organizers might say to the contrary. Prospective members will be looking for people in the back rows and at the front table who walk their walk and talk their talk to decide if the organization is really “theirs.”

We all know this is the reality, no matter what our rap or ideology might be. If there is a significant percentage of the community that is African-American yet only a few African-Americans are on the organizing committee, that will be reflected in the membership. And, vice versa, if whites or Hispanics or others are significant but not represented.

Why? Because the organizing committee members are the visible workhorses of the organizing drive until the launching of the organization in a formal meeting, and they are the invisible force of the organizing effort until leaders are democratically elected. They are the people one sees on the doors, giving the rap, and issuing the invitations to the meeting. They are the ones at the meetings with other community institutions encouraging them to participate or gaining a promise that they will be neutral and “wait and see” at the worse.

So, how do you find them?

You talk to “gatekeepers” in community centers, churches, union halls, recreation centers, social clubs, and local gathering spots. These people are not your potential organizing committee members usually, because they already see themselves, rightly or wrongly, as the community if they are community leaders, and they are often living outside the community as well. Any name you hear more than twice, you want to track down in order to measure whether or not they would be willing to join the OC and put in the work. When you find them, you want them to lead you to others.

What if you end up unbalanced in this early effort? Let’s say you have some people who seem ready to go, but the likely committee is not going to be balanced in the way required to build a powerful organization. A section of the map is blank. A major group is unrepresented. Time to grab someone and hit the doors cold in those areas and among those groups to prospect for the additional committee members you need.  Do the work. Ask for help. You will find them if you are persistent. Incidentally, building and balancing the organizing committee in this way is as important in a workplace as it is in a community, if that’s you organizing task.

A frequent question is whether or not existing self- or externally-defined so-called community leaders are likely assets for an organizing committee in a newly forming community organization? Usually not. Often community leaders have the history and may be seen outside the community as having the base, but don’t have it anymore. Furthermore, they often look backward at what they know and where they’ve been, rather than forward at what they need to know now and where they need to go. Absolutely, some are great, but getting fresh legs and faces on the doors is a surer step forward.

Once again, the organizing committee, not the organizer, will be the face and voice of the emerging organization, so a new voice is heard more clearly if it can break through the sound and fury of the past. Whatever problems you are unable to solve in the constructing the organizing committee, you will have to solve during the organizing drive, so this stage is worth the time and effort to try to do it right.

The Challenges of Organizing “Gig” Workers

When we think about organizing precarious “gig” workers, the task seems biblical.  The workers may be ready, or not, but the spirit and the flesh are weak. We all bemoan the rise of gig workers. Low pay, few hours, no benefits are some of them, worsened by the uncertainty of a position where you can only work to deliver something being demanded by consumers at a premium you are powerless to control. App companies misclassify workers as independent contractors rather than employees in order to pass on all of the maintenance and capital costs, aside from web work and marketing, to the workers, avoiding the personnel benefit and equipment costs that are routine and inescapable for regular employers. Worker conditions seem to cry out for a union, but unions have to be wary at answering the call no matter how loud.

A recent “strike” by Uber drivers in Los Angeles illustrates the problem. The company had triggered the strike by increasing its percentage of the fare, thereby decreasing drivers’ pay.  In response, the drivers turned off the Uber application on their phone.  Stated more plainly, they went on strike by simply didn’t respond to any calls or inducements to drive.

Did it work?  Who knows?  How would any of us, whether organizers, curious observers, or company officials, know how to measure the number of drivers protesting in this way versus those who just decided not to drive on any given day or got ticked off and responded to Lyft instead or whatever?  ACORN tried a similar approach in the early 1970s when we were fighting increases by the Arkla Gas Company in central Arkansas. Our “Turn Off Arkla Day!” action got a bit of press, as the Uber drivers did in Los Angeles. But in both cases, the company yawned since there was no way to measure whether the strike affected their cash flow at all.

Organizing gig workers can be challenging, but there’s some good work going on for bicycle deliver drivers in Europe, where companies like Uber Eats, Deliveroo, and others have become ubiquitous. Last fall one of ACORN’s affiliates organized a meeting in Brussels that brought together union activists interested in organizing European bicycle delivery drivers with fledgling groups of drivers from a dozen countries from the UK, Netherlands, Germany, and others. That meeting highlighted several active organizing projects:

  • Bike Workers Advocacy Project (BWAP), a new group seeking to organize cycling workers and, eventually, lead to some kind of unionization or union-style representation. Drivers at Postmates and Caviar in New York City and some bicycle shops seemed to be stirring the pot in 2018, but nothing seems to have emerged formally to date.
  • Bike delivery workers at Foodora and Dilveroo in Germany have raised issues about low wages and their independent contractor situation while advocating for a union.
  • In 2016, London gig workers for delivery services Deliveroo and Uber Eats organized protests and strikes for higher wages.  There was also an outcry in Philadelphia when a rider for Caviar was killed while working.
  • Legal action has managed to win back employment rights, such as a recent ruling in Spain that declared that a Deliveroo rider was in fact an employee and not an independent contractor, as the company claimed. Caviar is in mandatory arbitration in California on the same issue.  As importantly, riders in London struck for three days in 2018, and joined with striking McDonalds’s workers to demand higher wages, largely organized by a chapter of the Industrial Workers of the World (IWW).

While these examples seem promising, unions clearly lack any real commitment to organize these workers, and the workers have limited leverage. David Chu, who directs the European Organizing Center, a joint project between European unions and the US-based Change to Win federation, told me recently that he hears a lot of talk about organizing gig workers but sees little action in that direction, but perhaps the spirit – and many workers – are willing to organize, but the flesh-and-bones unions are not?

Serious organizing efforts in the United States have been contradictory and embryonic.  Uber in New York City and San Francisco reacted to organizing efforts by attempting to coopt the organizations into agreeing that the workers were not employees in exchange for consultation rights on rule changes and other issues like receiving tips.  More concerted efforts to create a mini-National Labor Relations Board representation mechanism were launched at the municipal level in Seattle, but the organizing effort is currently mired in litigation over preemption by the National Labor Relations Act and the question of employee status.

Local efforts reflect the way companies keep changing their practices, as Marielle Benchehboune, coordinator of ACORN’s affiliate, ReAct, noted recently in Forbes. “What will make the difference,” she suggested, is workers organizing “on the transnational scale.” Perhaps her analysis is correct.  Perhaps a rare global organizing plan could create enough pressure and leverage among these competing companies that could weld a workers’ movement together from the disparate pieces of independent worker mobilizations that are cropping up around the world.

Given the challenges, how much should we invest in organizing gig workers? Labor economists in the US caution that despite all of the hype from Silicon Valley and even some labor officials about the emerging gig economy, it involves a very small percentage of the workforce.  Others, like Louis Heyman in the recent book, Temp: How American Work, American Business, and the American Dream became Temporary, argue that gig workers are just the pimple on the elephant’s ass of contingent and temporary labor that has been hollowing out the American workforce for decades, just as consultants have chipped away at management jobs as well.

I heard something similar fifteen years ago, when I asked a leader of the Indian National Trade Union Congress if they were doing anything to organize call center workers in India. He answered that they estimated that there were 30,000 such workers, but there were 450 million workers in India at the time and hardly 9% were organized.  He then shrugged. That’s all he said, but we got the message.  There’s much to be done in organizing the unorganized, and resources and capacity are always restrained, whether in India or Europe or North America.

Is that a reason for not finding ways to organize workers who are attempting on their own to find justice on their jobs? Or is it just another rationale for doing little or nothing?  The one thing that seems clear is that if unions are going to be relevant to the modern workforce and the irregular and precarious forms of work that are being created by technology married to avarice, we must debate and address these challenges. It may be difficult, but unions and organizers need to devise practicable strategies that allow workers to organize, win, and build enough power to force companies to adapt and change.

I wish we had the answer now, because the workers seem ready, but one way or another, we need to figure this out quickly!

Wade Rathke, ACORN International

Columbus Free Press: Tips and Tools #7: Building an Organization? It’s Hard to Run an All-Volunteer Army!

By Wade Rathke in Columbus Free Press on March 6th, 2019

A mass organization can’t make it without members and volunteers doing a tremendous amount of work. There is no way that any level of dues collection or number of self-sufficiency schemes can ever substitute for all of the work needed to build large organizations. At the same, it’s almost impossible to be sustainable without some staff.

Recently, I was in Ireland for the first-time visiting tenant support and action groups in Dublin, Limerick, and Galway. Their work over the years had been amazing. The support groups had done great work in eviction defense. At different times the groups had been able to come together, particularly in Dublin, to rally thousands against government cutbacks or mass evictions in private and social housing with all the work done by volunteers and activists.

The problem was that it wasn’t sustainable. The mobilizations would ebb and flow, but would not yield permanent organization even though the issues and campaigns were often ongoing and interminable. Eventually, the numbers would fade and rather than building real power to protect and advance constituency interests, it would mean starting over and rebuilding to meet each new crisis, and often against even worse odds. Public bureaucracies can often dig in and outlast our surges, even when our cause is just. Corporate power, hedge funds, big banks and private equity, are currently entrenched and in ascension. It’s hard to beat the pros with a pickup squad.

So, we all agree that we need organization, but sometimes it takes some struggle for some organizations to understand that they also need staff, meaning real people whose final responsibility it is to help with the organizing, research, communication, and other tasks that smooth and sustain long term organization. The question asked over and over in Ireland and country after country, city after city, community after community, is simple: how do we get there?

Someone always plays the role of an organizer, but at the point in the organization’s life that you come to inescapable conclusion that you will have to build the capacity to sustain the work and create enough power to win, it takes leadership to get there. In the United Kingdom we are finding that we are overwhelmed with invitations to build new ACORN community organizations and ACORN Tenant Unions. We know they want – and need – staff, but we don’t have the resources.

We advise them to bring together ten or twenty people to begin the organizing. We send them a “starter” packet and support them on email, phone, and with occasional visits. Critically, as a dues-and-donation based organization, we give them a benchmark to reach. When they reach one-hundred dues paying members, we make them a formal local chapter or branch. As they reach one-hundred fifty, we help them hire an organizer part or fulltime depending on community support and commitments.

Sure, there are other ways to do this. You might get lucky and get a small grant to short cut the process, but, frankly, that’s a crapshoot, and many don’t score. Furthermore, grants come and mainly go, and then you are back to square one again. You might find an angel somewhere, but heaven knows that might even be harder. By creating a mechanism of support within the very community that is being organized whether neighborhood, workplace, or housing high rise, slowly but steadily the organization can get to a place that would be straightforward to sustain.

Not every emerging group will make it. Some will fall by the wayside finding the climb too steep and their step unsteady. But the ones that make it, have a chance of being able to not only fight successfully in the ongoing struggles, but also build the confidence and experience to scale up from that point forward. It’s not magic, but it is work, and it’s worth it.

Want to try? Call me maybe.

 

Columbus Free Press: Tips and Tools #6: Building an Organization? Why Not Dues?

By Wade Rathke in Columbus Free Press November 26th, 2018

In starting an organization, the first thought for many is, “Where do we get the money?” The answer doesn’t have to be that hard. Why not create a dues system? Seems obvious, doesn’t it? Why not have the people who are participating in the organization, many of whom will benefit from the work of the organization, “pay to play,” and have membership dues?

There is actual only one big obstacle: asking!

Many who desperately want to create an organization that would make change and build power are stymied by the cultural restraint that has been built around the simple problem that people are not comfortable talking about money. To be more specific, many are not as uncomfortable asking churches, unions, and of course charitable foundations for money as they are asking each other for money.

In building ACORN, we found that ironic. Most people don’t mind being asked for money, as much as others resist actually doing the asking.

There are more rationalizations that people offer for their hesitancy to ask people to put up their own money, than there are cracks in most neighborhood sidewalks. People are too poor. We have to win something first. No one has heard of the organization yet. And, so on.

ACORN has always been a constituency-based organization of low-and-moderate-income families. Paradoxically, most surveys indicate that lower income people are more philanthropic as a percentage of their income than are the rich. In truth, people have trouble believing that an organization is truly theirs and that they actually run the show, if they are not paying their share. If the dominant funding is external, from government or private sources, a wall of words will never fully convince lower income families that the organization is theirs, if someone or something else is paying the bills.

Certainly, money matters. It’s a scare commodity. There will be testing. They will make the organization do the work for the dues. They will remind the organization that they are paying their dues and those payments require accountability and establish entitlements. They will make the organization and its representatives, leaders, staff, and others continuously ask for the dues in order to prove that those precious dollars are as dear to the organization as they are to their family.

But, once the organization is willing to ask, people will pay. They understand the way the world works. They understand that nothing of value is really ever free. They understand that if they want to fight and win, there are costs.

Not every family will pay of course, but enough will. Not every family will pay the full amount, but almost all will pay something, or as much as they can, and many will do so regularly.

Besides asking, the other problem with a dues system is that it is hard consistent work. If an organization wins the foundation lottery sweepstakes and cashes in a grant for $10,000, there is no question that that is an easier lift, than creating a system where 1000 families pay $10 a month to make the same bank deposit.

The difference is that the foundation grant is a crapshoot. A system of regular dues payment, once created – and it is hard work – will yield that same $10,000 every month through bank drafts or direct deposits.

Furthermore, the organization will actually have 1000 real members, many of whom are as ready to act in concert with the organization, as they were to pay dues. With the foundation, all the organization may have is a friend in the program officer, until she gets another job next year and moves on.

The answer to the question, “Why not dues” may be that it is too hard to do the work, but it can never honestly be that people will not pay. They will, and they do.

Columbus Free Press: Tips and Tools #5: Building an Organization? Rain Follows the Plow

By Wade Rathke in Columbus Free Press September 22nd, 2018

In building an organization sustainability and self-sufficiency are essential, but money is not what drives the creation and survival of an organization. There is no amount of money that can substitute for a clear and solid organizing plan. In organizing, I always encouraged people not to worry about the money, but to first make the plan, focus fully on that, and totally believe that if the plan is good enough, then resources will follow. In expressing this principle at ACORN, I would always say, “rain follows the plow.” What in the world could that have meant? In the “manifest destiny” development of America and its drive to populate the vast lands from coast to coast, unscrupulous land promoters launched thousands of “prairie schooners” on the sea of the western plains by dangling before landless farmers the dream that “rain follows the plow.” In truth, the western states were environmentally a desert, rather than the anthem’s “fertile plains,” but the hucksters were arguing that famers could break the soil and that would trigger rain. In farming, we now all know better. But, in building any kind of organization, the organizing plan is in fact the plow that breaks the ground, and money will in fact “rain” to grow the organization, if the plan is sound and followed steadfastly. I realize that what I’m advocating sounds more like magic than a dependable tool that will build an organization, but I totally believe – and this has been my experience for decades – that an organizing plan is the a priori that drives money to support organization building. This is especially true if the organization is about social change and building power. Money that comes separate from a plan is merely transactional and though it may open some doors and allow some doors to stay open, if such resources are independent of the fundamental organizing plan, they will distract the organization, and are as likely to kill it, as grow it.An organizing plan is not a mission statement. A mission statement is frequently just a carefully crafted group of words, more often as not to attempt to satisfy a funder. An organizing plan is something that can be explained and shared. Such a plan is clear and concrete, and can then create the enthusiasm and support that will trigger deep and lasting commitments. An organizing plan demands commitments, hell or high water, for years from people to make it real. The kind of commitments that led families to pack up everything they owned and head for the unknown in Oregon or California, risking their lives, and building new lives, albeit displacing native people. An organizing plan articulates the broad steps and objectives to achieve an important future. A plan doesn’t need a story, it tells its own story. An organizing plan is something that is bigger than any of us, while encompassing all of us. For ACORN in the mid-1970s, building organization in twenty states by 1980, the 20/80 campaign, was such a plan. The critical component was the commitment of members, leaders, and organizers to implement the plan in the now sadly archaic statement “by any means necessary.” Certainly, it would cost money, but the ways and means of the finances was a presumption, an afterthought, or a collateral result, not an inspiration or a first order of business If the plan was good, the commitments were strong, and the goals were right, the money would come, somehow, sooner or later. There’s no “quit” in making an essential organizing plan to build an organization. There can’t be “ifs, ands, or buts.” There has to be enough drive that there is no such thing as obstacles that will stand in the way. The assumption has to be that success is inevitable, even if unpredictable and impossible to fix on a specific timetable or assign on the calendar. When organizers say, we will do such and such, “if we can raise the money,” what they are really saying is that they are not sure that the such and such is important enough to the organization or to themselves to assure that it will in fact be done. Such an organization may not be worth your time and trouble. The promoters may be trying to convince you that there’s rain in the desert, but if money is what the organization depends on for its growth and success, then the plan isn’t strong enough to realize an independent and powerful future.

Columbus Free Press: Tips & Tools #4: Building an Organization? Sustainability Matters

by Wade Rathke  in Columbus Free Press August 16th, 2018

An issue might be burning through the community. Friends and colleagues might always be talking about a nagging issue. A problem or grievance that might have seemed personal turns out to be shared by many who want a vehicle to demand justice and win change. Whatever triggers the drive to build an organization dedicated to building power and achieving change, if is worth doing, it is important to keep alive, and that means that sustainability always matters.

Sustainability in organizing is a euphemism for self-sufficiency. Self-sufficiency requires organizational control of financing.

There are two sources of organizational funding. One is external funding and the other is internal financing. Sustainability privileges either source if it is driven and determined by the organization itself.

External funding from government or foundation grants is never sustainable, because by definition such funding is always outside of the control of the organization. It comes and it goes based on decisions and criteria outside of the control of the organization. There are strings attached. There are “deliverables.” There are rules and regulations. Worse, external funding for social change organizations has become increasingly transactional, rather than transformative. There is almost invariably a quid pro quo, something wanted and required to receive the money. General support has become exceedingly rare in modern external fundraising.

That doesn’t mean that an organization should never except external funding, but it should be received only as a means to an end, and the end must include sustainability. External funding has to be the organizational equivalent of venture capital, allowing the organization to do things it might otherwise have been unable to do. The caveat requires that a plan to build permanent capacity and replicable resources has to be imbedded in the implementation of any external grant. If not, external funding can sidetrack an organization and be the classic gift horse where the organization should have done a closer inspection of the teeth.

Worse, an organization should never make decisions about hiring, staff compensation, or rental space based on the receipt of outside funding, because by definition anything that is not internally replicable is not sustainable.

Internal financing runs the gamut from membership dues, sustainer contributions, pancake breakfasts, fish dinners, annual banquets, rummage sales, and a thousand other projects along with the sweat equity of the members, organizers, and leaders. These events are all within the capacity of the participants in the organization and directly involve the potential beneficiaries and constituency of the organization.

An organization also controls its own ability to go to the general public for support. Technically, they are external to the organization, but replicable and sustainable. Seeking donors, running pledge drives, canvassing in public locations or other neighborhoods, tagging on street corners, all involve asking for and receiving public support.

A disciplined schedule of internal fundraising can raise significant organizational resources. Once routinized and regularly repeated, sustainability becomes a foundational principle.

Practicing that principle assures an organization’s survival and that alone should be enough to prove that sustainability always matters.

 

Columbus Free Press: Tips & Tools #3: Building an Organization? The Beginnings Prejudice the Ends

Columbus Free Press Article

By Wade Rathke  July 11th, 2018

Let’s be honest.

There are many reasons that people decide to build an organization. Anger is one. A rage at injustice or an action by the government coupled with a recognition that your one voice, even yelling, will neither be heard nor will it create change, is often enough. Sometimes it is a mutual agreement between friends or like-minded individuals to all stand together and dive into the deep end of the pool and see if an issue can be attacked, a campaign created, or maybe an organization formed. Sometimes it is neighbors or fellow workers aggravated about a persistent issue or grievance that forces collective action. Sometimes it starts, as it usually did with ACORN, with someone knocking on your door. There can be all manner of triggers that begin organizations and without care, there can be as many that stunt its development or suffocate its future from birth.

Issues, grievances, inequities, and injustices are all reasons to build campaigns, but for an organization to live and win it has to have structure. It is important to be humble to the task, even while hopeful of the future.

Organizational structure needs to be organic, meaning it needs to allow and encourage natural growth. It needs to be flexible, because there is no way to predict the future. For organization builders, this means not suffering from “premature certainty.” It is important to leave windows and doors open, so the organization can breathe.

In the favelas of Brazil and throughout Latin America, any visitor can see several feet of rebar sticking through the roof of homes in lower income areas. Families think ahead to the possibility of adding another room or an additional floor, if and when, they have the money or the need. Everyone one knows they would not want to tear up the house in order to expand it.

The same thing is true of organizational structure. If an organization begins organizing tenants, it is hard to then also organize homeowners, unless the structure is flexible and organic enough to allow and encourage that. The same for united workers and welfare recipients, yet all may have mutual interests and be stronger together in one organization.  The labor movement is a perfect example as they have endured name changes and often with difficulty become general worker unions even though they are called teamsters or carpenters.  Without care and foresight, the beginnings prejudice the ends.

The same problem can arise around other organizational issues like membership versus non-membership, political versus nonpolitical, democratic elections versus appointments, and so forth. Organizations can change, but it is very, very difficult, and often they die trying or are replaced by other formations that can evolve and adapt to grow and change more easily. This is not fate or happenstance, but the result of decisions with painful costs because beginnings prejudice ends.

Columbus Free Press: Tips & Tools #2: Building an Organization? Tax Exempt or Plain Nonprofit

From Columbus Free Press May 28th, 2018

Written by Wade Rathke

In building an organization for social change it is clear to everyone that the group should be nonprofit, but what does that really mean?  Talking to other people there seems to be an automatic assumption that nonprofit means the same as tax exempt.  Asking for advice from colleagues and lawyers, there is often a kneejerk presumption that if the organization is going to be nonprofit then by definition it should become a tax exempt under the rules of the Internal Revenue Service.

What is the real deal?  Is this an automatic and default option or is this something that an emerging group of leaders and organizers really needs to spend time thinking about when they begin building this new organization?

Structure matters!  Every minute spent on the front end of these decisions may determine the long-term future of the organization, so the time to debate these questions and make the hard decisions is at the very beginning before it prejudices the ends.

A nonprofit organization quite simply is an organization that cannot distribute “profits” or surpluses to its board members.  There are no investors or “owners.”   Certainly, there can be profits or surpluses, and if they are not reinvested in building the organization or spent as quickly as they are earned, then the organization might have to pay taxes.  In many states there are even “stock-based” nonprofits.  Such a structure is common for example in nonprofit building corporations and other asset-holding nonprofits where the governance structure might be created by issuing shares to various other nonprofit or even for-profit organizations to direct the affairs of the organization.   The shares indicate voting strength within the board, but such a share does not mean ownership or trigger any division of income or surpluses.  The shares in a stock-based nonprofit are analogous to a cooperative.  The membership definition in the bylaws of a nonprofit can as easily define members as individuals or families as they can other entities and organizations.

The important thing to remember about a “plain vanilla” nonprofit is that other than not distributing “profits” if there were any, there are NO other restrictions on the activity of a nonprofit, including for political action.  Furthermore, there is no minimum tax liability.  If a nonprofit spends or reinvests and dedicates its financial resources, including membership dues, it pays no taxes.

Tax-exempt in the United States means what it says at a very basic level.  A tax-exempt organization pays no federal taxes.  Depending on the state, county or city, such an organization may enjoy other tax exemptions for purchases or land holdings, especially those that are religious or educational institutions.  The most favorable exemption is as a public charity under section 501c3 of the Internal Revenue Service codes.  Unions, cooperatives, and trade associations enjoy some tax-exempt benefits under other 501c sections as well.

In exchange for the exemption from federal taxation, the organization agrees to limit its political activity and right to public expression in “grassroots lobbying.”  Many organizations and funders insist that the ban on such activity is total or only allowable at a small percentage of the total expenditures of the organization.  Any such assignment is speculative.  There has never been a regulation issued by the IRS or a legal case based on prohibited or allowable activity by a tax-exempt organization that has established a number or guideline, so it is all guess work, unfortunately rooted in the appetite for risk by the leaders or lawyers of such a nonprofit.

Many funding organizations, foundations, and rich individuals insist on funding only tax-exempt organizations.  There is no good reason for them doing so.  In the case of religious organizations, like the Catholic Campaign for Human Development for example, since their contributions come from the public, there are no requirements that would restrict their grants.  For foundations and others, their demand for tax-exempt status from their grantees is implicitly the way that they subcontract the responsibility for oversight for their own tax benefits from themselves to their grantees.  A foundation exercising its own expenditure responsibility for its grant could simply monitor how its grantee of whatever shape and stripe was spending its monies to make sure they qualify as educational and charitable.  Instead most of them protect their own tax benefits by claiming their donations to be tax exempt by forcing the grantee to accept the liability and police their grant.  Granting to a 501c4 organization rather than a “plain vanilla” nonprofit gives no benefits to the grantee, it simply shields the donor from public scrutiny.

An organization may want to create a separate tax-exempt organization as a partner, while maintaining its nonprofit status to allow maximum flexibility of action to its members or mission.  If not, an organization may want to partner with an independent tax-exempt organization whether intermediary, church, or other 501c3, to act as fiscal agent to meet a funder’s requirements.

Under no circumstances in creating an organization should the decision on whether to be tax-exempt or a regular nonprofit be allowed to be dictated by a funder or a lawyer.  In a democratic, membership organization the path forward will almost always dictate being a simple nonprofit, so the future is open to all prospects and possibilities going forward.  Any decision to create a tax-exempt organization is a decision that should be carefully made after full deliberations since the organization’s future will be narrowed severely by the requirements of the Internal Revenue codes in all of their specificity and ambiguity.

Columbus Free Press: Organizing Tips & Tools Column Tips & Tools #1: Building an Organization? To Incorporate or Not to Incorporate

From Columbus Free Press May 7th, 2018

Written by Wade Rathke

Link to Article

So, you have an idea for a way to make your neighborhood better, create social change, or join the resistance. You and others have hit the streets a couple of times, gone to public and community meetings, and want to reach out to others and take the next step to make things happen. A friend says his cousin is a lawyer who could give you advice. You have been online and learned a little something. It must be time to incorporate your idea so that you can build a “real” organization.

Whoa, Nelly, not so fast! Before your knee jerks and you incorporate, you have to figure out the “what” and “when” that would lead you down that path and answer the threshold question of “to incorporate or not to incorporate?”

Please understand that you can get organized and build and organization without being a corporation. For example, almost the largest membership organizations in the United States are labor unions and none of them are incorporated. They – and many other organizations at the local level – are “unincorporated associations of groups.” Most social movements, often forever and a least for some period of time, are often unincorporated. The National Welfare Rights Organization and its affiliates in the late 1960s and early 1970s was unincorporated. ACORN, the Association of Community Organizations for Reform Now, was unincorporated from 1970 to 1978.  Occupy and Black Lives Matter more recently were unincorporated associations. Just like labor unions, such associations can have bylaws, bank accounts, sign contracts, own property, employ staff, and all of the other operations that go with building an organization.

The decision to incorporate is not one for the lawyers to make. Primarily, it is one for the organizers and members to make based on what they are likely to do and how they are going to do it. Secondly, it is based on how the organization looks at risk and liabilities.

Many movement-style and direct-action organizations resist or delay incorporation because they want to protect flexibility in their tactical selection. An incorporated organization can easily be enjoined in court which prevents action by all the members of the organization.  In order to legally enjoin an unincorporated organization, the government or whatever organizational target would have to name specific individuals. The injunction would prevent their action, but not the action of other unnamed members. In the civil rights era where nonviolent demonstrations and civil disobedience arrests, whether those forcing integration or sitting in welfare offices were critical tactics, were common, avoiding injunctions was a strategic necessity. The NAACP could be sued for a boycott’s impact in Mississippi and the liability could be millions, because they were incorporated, but it was harder when a movement was unincorporated as recent litigation around assessing liability to Occupy and Black Lives Matter has shown.

According to research conducted for In These Times in partnership with Ear to the Ground, law enforcement in at least eight states—Arizona, Florida, Georgia, Iowa, Minnesota, Missouri, Washington and Wyoming—lobbied on behalf of anti-protest bills in 2017 and 2018. The bills ran the gamut from punishing face coverings at protests to increasing penalties for “economic disruption” and highway blockage to criminalizing civil protests that interfere with “critical infrastructure” like oil pipelines. Louisiana and other states are currently debating such legislation in their legislatures. Much of this new anti-protest curtailment of free speech has occurred in the wake of the Standing Rock protests against the Dakota Access Pipeline in North Dakota in 2016. The Standing Rock Sioux tribe as a legal entity could be stopped legally. The thousands who came to support them could not be stopped in the same way.

If you and your neighbors and friends were just trying to put together a group to make your voices heard, you might ask, “Why care about all the drama and history of social movements?” The answer is simple: because it matters! Would you build the roof and walls of a house before you figure out how big the house would be, where it would be located, and who would live there? Of course not. The same goes for starting an organization.

The reason to not incorporate your organization is to force authorities to hold individual members accountable for actions, the reason to incorporate is to protect individual members from action by authorities. Now, I’ve confused you, but step back. The only real reason to incorporate is to protect assets. If your organization has no assets, incorporating can put limits on your action. If your organization has assets and an increasingly clear and identifiable membership, then may be time to incorporate in order to protect the downside as fiercely as you tried to advance the upside in the beginning.

The real organizing tip here is simple: think first, before you incorporate. Make sure organizers have a clear vision of what they are trying to build before they make a permanent decision about the structure of the organization. Structure matters!